Which of the following best describes a 'counteroffer'?

A counteroffer is most accurately described as a rejection of the original offer, and then proposing new terms. When one party makes an offer, the other party can respond with a counteroffer, which effectively negates the original offer. This indicates that the second party does not accept the initial terms but is instead suggesting alternative conditions.

Recognizing this eliminates the possibility of ambiguity in negotiations. Once a counteroffer is made, the original offer is no longer active, and the negotiations shift to the new terms suggested in the counteroffer. This dynamic is crucial in real estate transactions, where terms of sale, price, and other conditions must be clearly established and agreed upon by both parties involved.

Understanding this concept is fundamental, as it clarifies the nature of negotiations and the importance of precise communication in contract law. Other options, while describing different aspects of offers and negotiations, do not encapsulate the true essence of a counteroffer as succinctly as the correct choice does.